April 23, 2001

The Honorable Elaine Chao
Secretary
U.S. Department of Labor
200 Constitution Avenue, NW
Washington, DC 20210

Mr. Michael Ginley
Office of Enforcement Policy
Wage and Hour Division
Employment Services Administration
U.S. Department of Labor
Room S.3502
200 Constitution Avenue, NW
Washington, DC 20210

Re: Interim Final Rule Regarding Labor Condition Applications and Requirements for Employers Using Nonimmigrants on H_1B Visas in Specialty Occupations and as Fashion Models, and Labor Certification Process for Permanent Employment of Aliens in the United States, 65 Fed. Reg. 80109, December 20, 2000.

Dear Ms. Chao and Mr. Ginley:

I am writing to give you my comments in response to the Interim Final Rule issued by the Department of Labor to implement provisions of the American Competitiveness and Workforce Improvement Act of 1998 ("ACWIA", Title IV of Pub. L. 105_277, October 21, 1998).

In nations where the rule of law is not in common practice, it is customary - by design - for the government to make rules so complex and difficult to observe that many employers and citizens are in technical breach of the law by normal actions. Such practices vest enormous authority in bureaucratic officials to pick and choose what to enforce and against whom. As the Secretary well knows, the reason so many immigrants come to this great land is that America does not work that way.

Let me express my disappointment in the prior Administration's rush to publish these regulations in its final days so as to make them binding on President Bush and his Secretary of Labor before there was an opportunity to review the rules. Unfortunately, given the previous Administration's antipathy toward H-1B visa holders and their employers, it is clear the intent of the regulations was to impose excessive burdens on high technology employers and other businesses - and thereby lessen the use of the visas -- as part of a misguided ideological crusade against foreign-born individuals and the companies that hire them. As such, President Bush's Administration should feel under no obligation to retain such regulations, since I know that you and the President do not share the unfortunate agenda that motivated the issuance of these rules by the previous Administration.

It is my hope that you will review these interim final regulations and re-publish them to correct their many problems and thereby prevent the harm these rules will inflict on our high tech economy and America's competitiveness. The interim final regulations impose unnecessary burdens on employers, exact unrealistic requirements, and go beyond the statutory authority granted to the Department by Congress. In formulating them, the Department ignored the views of many employers and numerous members of Congress. In addition, the Department ignored the statement of Congressional intent submitted contemporaneously with floor consideration by Senator Spencer Abraham, then the Chair of this subcommittee and, as discussed below, the primary Member of Congress responsible for the final language of the ACWIA. Senator Abraham's comments constitute legislative history and as such clearly provide the ground work for the Act's implementation. (Even absent Senator Abraham's statement, there is little or no authority in statute for the micro-managing of employers and their employees that these regulations seek to enshrine.)

Senator Abraham's Comments and Explanatory Document are Entitled to Substantial Weight, as They Constitute Legislative History

It is clear that the Labor Department under the previous Administration went to great lengths to avoid using Senator Abraham's statement of Congressional intent, not for legal or substantive reasons, but solely due to an ideological predilection against employment-based immigrants and business immigration.

A review of the facts demonstrates that Senator Abraham is the de facto sponsor of the ACWIA, since he drafted the original Senate bill, participated in drafting the compromise bill, and served as the deputized negotiator in talks between Congress and the White House finalizing the final bill submitted to the House. In March of 1998, Senator Abraham introduced the American Competitiveness Act (S.1723) which would increase the cap on H-1B visas for foreign born professionals. Under his leadership, the bill passed the Senate Judiciary Committee on a 12-6 bipartisan vote and later passed the full Senate on a 78-20 vote. Since the House Judiciary was also considering a bill addressing the H-1B visa, Senator Abraham and Representative Smith met to negotiate a compromise bill. Because the compromise bill included the imposition of a fee to be paid by the employer, the compromise bill was required to originate in the House. ⁽¹⁾ Accordingly, it was incorporated into a proposed amendment drafted by Senator Abraham and Representative Smith. Before the bill could be voted on in the House, the White House issued a public veto threat and a call for fifteen changes. ⁽²⁾ Senator Abraham was deputized to negotiate these remaining issues with the White House. When the final bill was introduced in the House by Representative Smith, it constituted a compromise negotiated between Senator Abraham and Gene Sperling, the White House economic advisor. Senator Abraham's involvement in the final compromise was widely cited in articles concerning the bill. ⁽³⁾

Senator Abraham was the principal author of the bill; thus, his comments should be weighed significantly by the Department in determining legislative intent to be used in the formulation of the regulations. Statements of the author of a bill long have been held proper for consideration as showing the conditions of history of the period when the statute in question was enacted, or the mischief which it was intended to remedy, and thus as throwing light on its proper interpretation. ⁽⁴⁾ In addition, Senator Abraham's statement constitute contemporaneous comments as they were offered when the bill was up for vote in the Senate.

When determining legislative history, the Courts, particularly the Supreme Court, have followed a policy of looking to the source that will provide an accurate description of the common understanding held by the Congress at the time of enactment. The Court has traced the evolution of the statute, from early legislative proposals until enactment, with the focus on the interpretative issue in dispute. ⁽⁵⁾ The goal of the Court has been to recreate the general assumptions, goals and limitations of the enacting Congress so as to reconstruct the answer the enacting Congress would have given to the interpretative issue. Senator Abraham's comments on ACWIA serve as the best source from which to ascertain the common understanding of the Congress. Senator Abraham was deputized by both Houses of Congress to negotiate with the White House. Therefore, by entrusting Senator Abraham with this task, both the House and the Senate signaled their belief that Senator Abraham was the member of Congress who would best represent the combined Congress's intentions with regards to this bill in negotiations with the White House.

In his role as negotiator, Senator Abraham represented the Congress and, thus, he was required to go beyond his personal interests and carry out his duty to advance and promote the common understanding shared by the Congress. Senator Abraham fulfilled the task entrusted to him by negotiating the final draft of the bill with the White House. His comments should be seen as an extension of his role as deputized negotiator. His comments and the Explanatory Memorandum served to update his fellow Members of Congress of the results of the final negotiations. In this way, his comments and the Explanatory Memorandum were not meant to express his own personal views but rather to more fully reiterate legislative discussion and the events leading up to the final bill, specifically the process and the results of the negotiations with the White House. ⁽⁶⁾ Therefore, the Department of Labor should look to his comments and explanatory document to determine the common understanding of Congress in enacting this bill.

Senator Abraham's important role in guiding the bill through its various drafts also entitles his comments to considerable deference. Specifically, the Court has considered the drafting evolution of a bill when examining legislative history. In TVA v. Hill, the Court examined the drafting evolution of the bill that was adopted, including language of bills that were not adopted and drafting changes made in the conference committee. ⁽⁷⁾ Specifically, the Court has given a high level of consideration to the drafters of bills in general. The Court has even considered law professors' testimony ⁽⁸⁾ or interest groups ⁽⁹⁾ if they participated in the drafting of the bill. In addition, the Court has considered the statements of Members of Congress identified as players on the bill.1 ⁽¹⁰⁾ It cannot be doubted that Senator Abraham played a major role in the drafting of the final bill. Therefore, his statements should be given a high level of deference when determining legislative intent.

As the ACWIA's principal sponsor in the Senate, Senator Abraham introduced into the Congressional Record an Explanatory Memorandum describing ACWIA's purpose and providing a section-by-section analysis of the Act .1 ⁽¹¹⁾ The Supreme Court has held that a memorandum, inserted in the congressional record by a sponsor of legislation, which illustrates the meaning of a term used in that legislation, is a weighty gloss on the legislation.1 ⁽¹²⁾ Additionally, Senator Abraham's Explanatory Memorandum should be considered a de facto committee report. Committee reports are the most frequently cited and relied-upon sources of legislative history,1 ⁽¹³⁾ and in the Court's traditional view the most authoritative source. "A committee report represents the considered and collective understanding of those Congressmen involved in drafting and studying proposed legislation. Floor debates reflect at best the understanding of individual Congressmen. It would take extensive and thoughtful debate to detract from the plain thrust of a committee report."1 ⁽¹⁴⁾ Committee reports are often the best evidence of bicameral agreement, either because the House and Senate reports are identical, or because a conference report explicates the chambers' resolution of differences.1 ⁽¹⁵⁾

Senator Abraham explained to the Senate that he was offering the Explanatory Document as a substitute for a Committee Report: "Because much of this legislature was developed after the conclusion of the regular Committee process, I have also prepared an explanatory document that performs the function commonly performed by the Committee Report of describing the legislation and the purpose and interrelationship of its various provisions in detail. I ask unanimous consent that this document be printed in the Record."1 ⁽¹⁶⁾ It is important to note that Senator Abraham specifically stated that he was offering the Explanatory Document as a substitute for the committee report. He explained that he felt the explanatory document was necessary because "much of the legislature was developed after the conclusion of the regular Committee process." By this, he refers to the last minute negotiations with the White House. The Congressional Record shows that no senator objected to Senator Abraham's characterization of the memorandum. Therefore, Senator Abraham should be given the deference due to a committee report.

Representative Smith's Comments

The Department regulations refer extensively to Congressman Smith to derive the legislative history. However, this reliance on Congressman Smith's November 12, 1998 comments is misplaced because Congressman Smith's comments were made several weeks after the enactment of the bill and because Congressman Smith was, in actuality, not nearly as involved in the final drafting and composition of the bill as Senator Abraham.

While Representative Smith did sponsor the Bill in the House, his remarks should not be given much weight because they are inconsistent with the overall context of the situation.1 ⁽¹⁷⁾ The Supreme Court decided that a sponsor's comments must be considered in the context of the situation. In Consumer Product Safety Commission v. GTE Sylvania, the Supreme Court decided that a representative's statement must be considered with the Reports of both Houses and the statements of other Congressmen.1 ⁽¹⁸⁾ The Court decided not to give weight to Representative Moss' statement after noting that the reports of both Houses and the statements of other Congressmen all refuted Representative Moss' interpretation of the bill.1 ⁽¹⁹⁾ The Court has often decided not to rely on the sponsor's statement when it is contradicted by the statute and the statements of other congressman.2 ⁽²⁰⁾ Here, Representative Smith's comments are contrary to Senator Abraham's comments and to the Explanatory Document which serves as a de facto committee report.

In addition, the Court looks beyond the mere fact that a Congressman officially sponsored a bill. Instead, the Court looks to determine to what extent the official sponsor of the bill in question actually provided the underlying foundation of the bill. The Court noted that "while Representative Moss claimed sponsorship of the CPSA generally, he was not a sponsor of the original bill that ultimately provided that legislation with its provisions governing information disclosure." Rather the Court noted that Representative Moss had authored another bill, H. R. 8157, that contained much less restrictive disclosure requirements than those ultimately adopted. The Court concluded that given these fact, Representative Moss' statement was thus not one that provides a reliable indication as to congressional intention. Here, Representative Smith did officially sponsor ACWIA. However, as evidenced by the statement on the Congressional Record, Senator Abraham and Representative Smith had drafted a compromise bill which was primarily based on Senator Abraham's bill. It was decided that Representative Smith would introduce the bill because the bill imposed a fee on employers and, thus, constituted a tax bill. Therefore, Representative Smith's position as the official sponsor is not indicative of his level of involvement in the drafting. The Court considers whether the person is a "player" on the bill.2 ⁽²¹⁾ While Representative Smith was involved in drafting the compromise bill, he was not involved in the final negotiations between the Congress and the President.2 ⁽²²⁾ Rather, it was public knowledge that Senator Abraham and Gene Sperling had negotiated what was publicly called the Abraham-Sperling Agreement.2 ⁽²³⁾ In fact, Senator Abraham and the White House staff conferred over a summary release on the Congressional-White House Agreement on H-1B to ensure that the summary accurately described the agreement.2 ⁽²⁴⁾

In addition, the Department's reliance on Representative Smith's comments to establish legislative intent is problematic since Representative Smith's comments were offered six weeks after the House passed the Bill. Post-enactment statements are generally not used to construe statutes because the Court justifiably fears that such statements might serve as an attempt to rewrite legislative history.2 ⁽²⁵⁾ Representative Smith's comments on November 12 would definitely constitute a post-enactment statement. Hence, the Department should not rely on those comments.

I therefore direct your attention to the statements of Senator Abraham discussed above and to the comments that the Senator previously submitted with respect to the proposed regulation. I also ask that you consider the following specific comments on selected portions of the Department's Interim Final Rule, many of which are based on the comments of Senator Abraham.

Travel by H-1B Nonimmigrants

Among the many problems with the Department's regulatory approach is its insistence upon extensive and detailed regulation of the movement of employees who are in H-1B status. Previous incarnations of the regulation included an astonishingly complex scheme of limiting visits to any area by all H-1B employees to 90 days in a 3-year period, and prohibiting visits by any other H-1B employees thereafter without undergoing the entire labor condition process.

The latest version of the regulation includes an equally complex 30 or 60-day limit on trips by any H-1B employee, combined with a bizarre definition of "place of employment" that attempts to at once define certain activities as not being visits to places of employment and include almost every place an employee could visit as a "place of employment" requiring either a new LCA or compliance with a Byzantine regulatory scheme. Perversely, the regulation precludes any short-term trips by an H-1B employee if a labor condition application already is in place for that company, and severely punishes any company that , even by accident, has an H-1B employee in a location for more than the time limit within a year. Preventing violations of these odd provisions would require companies to establish elaborate, centralized monitoring programs for all travel by any H-1B employee, running counter to standard business practices in virtually all segments of the economy. Senator Abraham, in a January 1, 2001, comment on this provision submitted with Senator Graham, best expressed the problem: "The DOL has no authority to impose the kind of complex monitoring requirement included in any of [the various versions] of the regulations."

Congress granted the Department no authority--implicit or explicit--to impose these kinds of complex travel monitoring requirements, or these limitations upon travel. Under the INA, employers are required to post a notice at the place of employment if there is no applicable bargaining representative, and are required to pay the prevailing wage in the area of intended employment and the actual wage at the place of employment. "Place of employment" is a term with a plain meaning: it is where the individual is employed. In modern commerce, individuals employed in one location frequently must travel to other locations to perform their duties. This does not mean that they are employed there. It only means that they are visiting. At no point did Congress intend to authorize such regulation of ordinary commerce, even under the guise of defining place of employment. To ask companies to centrally monitor the movement of all of their H-1B workers and to declare a violation if arbitrary time frames are not obeyed is well beyond any provision of the INA or ACWIA.

For the same reasons, the requirement that employers post notices at third party sites is beyond the Department's authority, since third party sites are not the employee's place of employment. In addition, Congress has clearly defined where third party site relations are subject to the law. Under ACWIA, certain H-1B employers are obligated to obey certain guidelines with respect to displacement of workers at third party sites. If Congress had intended to also require that postings be made at these third party sites, that requirement would have been enacted, most likely with respect to dependent employers. For the Department to try to impose such a requirement on all employers, including non-dependent employers, is far beyond its authority. In fact, Congress assiduously avoided imposing on businesses requirements that are physically impossible to meet. We do not authorize agencies to impose such requirements. Holding a company liable for a posting at a site it does not control is beyond reason as well as authority.

Employers' Wage Obligations for H-1B Workers' "Nonproductive Time"

(Sec. 655.731)

The Department is ignoring legislative history and business reality in treating time that an employee is not working due to certain plant closings as "benching." Senator Abraham stated that INA 212(n)(2)(C)(vii)(IV) "makes clear that an employer does not commit a violation of the prevailing/actual wage attestation by granting an H-1B worker a period of unpaid leave or reduced pay for reduced hours worked at the request of the H-1B worker. Thus, H-1B employees taking unpaid leave for other reasons, i.e. leave under the Family and Medical Leave Act or other corporate policies, annual plant shutdowns for holidays or retooling, summer recess or semester breaks or personal days or vacations, should not be considered 'benched' (emphasis added)." Cong. Rec. S12754, October 21, 1998. (Emphasis added.)

Definition of Employer's Business Expenses That May Not Be Imposed on H-1B Workers

The proposed regulation would prohibit H-1B employees from paying expenses of the H-1B process. The costs of obtaining H-1B work authorization, like so many other employment expenses that are not peculiar to H-1B workers (such as relocation costs), are sometimes borne by the employer and sometimes by the employee. That is not a matter for government regulation, but instead should be left to agreement between the parties. Further, it is very disturbing to see the Department telling H-1B employees that preparation of the documentation that is so central to their future ability to work and live in the U.S. cannot be performed by the employee's attorney. This is not something that the Department has the authority to dictate.

Documentation Requirements

The labor condition application process as structured under the Immigration and Nationality Act (INA), requires the employer to file an application containing a number of attestations. Under the statutory scheme, the Secretary of Labor is then charged with reviewing the application "only for completeness and obvious inaccuracies." The statute further states: "Unless the Secretary finds that the application is incomplete or obviously inaccurate, the Secretary shall provide the certification described in section 101(a)(15)(H)(i)(b) within seven days of the date of filing of the application." INA § 212(n)(1).

One need look no further than the language of 212(n)(1) to see that the Secretary of Labor is not supposed to be engaging in an elaborate substantive review. Rather, she is only supposed to be satisfying herself that the application meets the formal requirements established by statute. It is also plain from the statutory text that employer compliance with the obligations they undertake by signing these attestations is to be enforced not at this preliminary stage, but at the point that an interested party finds evidence of non-compliance and files a complaint with the Department. INA § 212(n)(2). Pervading this entire statutory scheme is a theme of simplicity: that employers are required only to do what is necessary to ensure that the attestations are met.

It is in this context that the Department's persistence in developing elaborate documentation and compliance schemes, involving extensive paperwork and in many areas a complete restructuring of how the employer conducts its business, is most puzzling. The regulation ranges from preserving documentation of a variety of determinations by the employer to the retention of nearly 30 types of other information and records about the company, its policies, its practices, and its employees. It requires each employer with an H-1B employee to structure a wage system, develop a centralized tracking system for employee travel, and establish other systems that have no other business reason for existence.

The INA contains no authority for requirements of these types, and in enacting ACWIA, Congress authorized no new paperwork requirements other than the amendments to the attestations of the Labor Condition Application form. In fact, in testimony before the Senate Judiciary Committee on February 25, 1998, Raymond J. Uhalde, Assistant Secretary for Employment and Training, stated, "To check off a fifth box, as these employers say, that they have recruited in the labor market, in the local labor market; and second, to check off a box that says that they have not laid off workers other than for cause obviously -- not laid off workers in these same occupations. That wouldn't take any more time." Why, then, has the Department set forth requirements that will take hours more time? Not assigning any compliance time to fulfillment of these requirements for purposes of the Paperwork Reduction Act and other similar statutes, does not mean that this time will not be needed. It means that the Department is, at best, being disingenuous in its estimates.

The truth is, many of the requirements in these regulations are not authorized by Congress and are not necessary under the statutory scheme. As discussed below, the Department needs to return to the drawing board and ask whether its requirements--both the new ones engendered by this latest regulatory incarnation and the ones already established under earlier regulations--are necessary in light of the statute and the burdens imposed.

Labor Condition Application Processing

In its untoward rush to finalize the regulation before the change in Administration, the Department ignored one of the fundamental mandates of the statute: that labor condition application certification must be provided within 7 days of the filing of the application (INA section 212(n)(1)(D). This new regulation depends on the "faxback" system (it appears that even if the application is filed by mail, it is scanned into the faxback system, making this system the only available means for processing). While, before the new regulation, the faxback system was one option for filing labor condition applications, it was not the exclusive means of filing, so that if it failed, there was an alternative. The existence of a back-up option was important, because the faxback system was greatly flawed in its ability to process the old, 2-page form.

Now the faxback system is the only option available, and must process a form that is 50% longer. In the press to finalize the regulation, it appears that the Department did not provide adequate time for the system to be converted to accommodate the new form. It therefore is essential that a viable alternative to the faxback system be developed quickly. We understand that there is capacity in place to move to an electronic filing system, except for the problem with signature recognition. However, the signature problem can be resolved by requiring that the form data be filed electronically, but that the signature does not need to appear on the form until it is filed with the INS. Since filing with the INS is necessary before there is any H-1B worker to be employed under the labor condition application, such an approach would not in any way harm the enforceability of the application, but could solve the Department's inability to meet its statutory processing deadline.

Use of H-1B Portability without a Certified LCA

Section 105 of the American Competitiveness in the Twenty-First Century Act (Pub. L. 106-313), enacted in October 2000, allows "persons previously issued a visa or otherwise provided H-1B status to accept new employment upon the filing of a new petition by a new employer, subject to the final approval of the petition." This section, which has become known as "portability," evinced a clear Congressional mandate that certain foreign nationals may immediately begin work for an H-1B petitioning employer upon the petitioner's filing the H-1B, rather than waiting for the agency processing to be completed.

The regulation appears to attempt to defeat the intent of this provision by apparently requiring that the labor condition application, which the Department has been unable to certify in a timely manner, be certified before such "portability" can take place. This is ironic, since the Department of Labor in the past claimed that it opposed H-1B visas because H-1B visa holders could not change jobs as quickly as the Department would like. By now making it more difficult to change jobs colors the Department's previous stated opposition to H-1B visas as, at minimum, lacking sincerity.

On January 1, 2001, Senator Abraham, wrote the following to Mary Ann Wyrsch, then the Acting Commissioner of the Immigration and Naturalization Service:

On the H-1B portability provision, the Senate Judiciary Committee report for S.2045 states that, "This section allows an H-1B visa holder to change employers at the time a new employer files the initial paperwork, rather than having to wait for the new H-1B application to be approved. This responds to concerns raised about the potential exploitation of H-1B visa holders as a result of a specific employer's control over the employee's legal status...it would frustrate the purpose of the portability provision for INS to require a labor condition application (LCA) be approved. I am aware that DOL, in its recently published regulations, appears to require approval of an LCA as condition for portability. That is a clearly inappropriate interpretation of the law and, in any event, it is INS, not DOL, which is required to interpret the portability provision. It is common and accepted practice to file H-1B petitions prior to approval of the LCA when DOL is not certifying cases in a timely manner because of a technological failure or other reasons. It is the signature and dispatch of the LCA by the employer to DOL that constitutes the making by the employer of certain attestations or promises concerning wages and working conditions.

To the extent that section 655.705(c)(4) of the regulation, relating to the portability issue, has any legal effect whatsoever, it should be deleted.

Determination of the "Actual Wage"

I am pleased to see that the Department paid at least cursory attention to the comments of Senator Abraham and others with respect to the inappropriateness of requiring an "objective wage system" of any employer hiring an H-1B worker. Unfortunately, the elimination of the "objective wage system" requirement is a change in form rather than substance. The IFR still requires such a system; it has merely deleted the proposed Appendix A and the word "objective." Unfortunately, the regulation still requires that employers develop and use a wage system even if they do not have one. Section 655.731(a)(2) indicates that "every H-1B employee is to be paid in accordance with the employer's wage system," thereby apparently indicating that employers are required to create such a system. The language "retain documentation specifying the basis it used to establish the actual wage," as well as language in section 655.760(a)(3) requiring an explanation of the system used to set the actual wage, suggests that employers must explain and document the entire "basis" or "system" of determining the wage system for the position.

As Senator Abraham, together with Senator Graham, stated in his February 19, 1999, comment on the proposed regulation, "the Department of Labor is somehow deriving from its practically ministerial obligation to review applications for completeness not only the authority to require employers to maintain all kinds of documentation in a file in no way intended for its benefit, which would be remarkable enough in its own right. The Department even thinks it has the authority to dictate the wage structure of any employer that files a labor condition application…. This is so outside the Department's statutory authority that if we had heard from a third party that it was even under consideration, we would not have believed it." As Senator Abraham made clear, the Department does not have this authority, and has no business trying to tell employers to set up a wage system that they do not have for other purposes. "Rather," Senator Abraham said and I concur, "the Act requires that employers pledge not to pay H-1B workers less than the prevailing wage for the occupational classification or the actual wage for similarly qualified workers in the specific employment in question." That is all that the statute requires, and there is no need for the Department to reach into corporate pay structures to legislate anything further.

I am further troubled by the regulation's characterization of actual wage as a constantly-changing factor, through its requirement that the employer continually revise its documentation to demonstrate the employer is meeting the actual wage and provide adjustments to the H-1B employee to meet these changes. The statute was very clear on this point, requiring that both actual and prevailing wage be determined "based on the best information available as of the time of filing the application." INA section 212(n)(1)(A)(i)(II). There was a rational reason for this approach: wages are changing constantly both within a given operation and in the market in general. If the actual and prevailing wages changed constantly, no employer could ever be sure that it was paying the required wage. For this reason, Congress chose to set the required wage at the time of filing, and the Department has no authority to reverse a Congressional mandate.

Non-Displacement: Definitions of Employment

Senator Abraham indicated in his explanatory statement of intent regarding the placement of an H-1B worker with another employer that: "The requirement that there be 'indicia of employment' between the employer with whom the covered employer is placing the covered H-1B worker and the H-1B worker is intended to operate similarly to the provisions in the Internal Revenue Code in determining whether or not an individual is an employee." (144 Cong. Rec. S12751).

The regulation, however, uses a common law definition of what constitutes "employment" for purposes of determining who is an "employee of the employer," covering a broader class of persons than those the IRC would recognize. This common law definition relies on an examination of some 16 factors. This unnecessarily complicated and subjective definition is far beyond Congress' intent and leaves both employers and workers in doubt as to whether a specific employer is required to comply with regard to a specific worker. Ironically, the regulation uses the IRC definition elsewhere, in distinguishing between independent contractors and employees. It is difficult to see why that clearer and more widely understood standard is not being used in the non-displacement context.

Non-Displacement: Other Issues

In considering whether a departing employee was offered another job opportunity at "equivalent or higher compensation than from which the employee was discharged," as ACWIA states, the regulation indicates that job offers made to departing employees must take into account cost of living differentials and relocation expenses if the new job opportunity is in a different geographic location. This is an invention that is not contained in the statute. As Senator Abraham indicated in his February 19, 1999 comment, "if Congress wished to require geographic wage adjustments in job offers as part of the defense against violations of the layoff attestations it would have chosen to do so. It did not choose to do so."

Recruitment Attestation

The recruitment attestation of Section 412 of ACWIA requires a covered employer to state that it has taken good faith steps to recruit U.S. workers for the job for which an H-1B worker is being sought and that it has offered the job to any equally or better qualified U.S. worker.

As is clear from the text of the relevant provision, and as Senator Abraham explained on October 21, 1997, when ACWIA was before the Senate: "This provision allows employers to use normal recruiting practices standard to similar employers in their industry in the United States; it is not meant to require employers to comply with any specific recruitment regimen or practice or to confer any authority on DOL to establish such regimens by regulation or guideline." (144 Cong. Rec. S12751.)

The regulation nevertheless requires: 1) both passive and active methods of solicitation; and 2) recruiting by certain external and internal means. Also, the regulation requires that all recruitments include efforts to reach former employees, even though many companies have, for sound reasons, policies against re-hiring past employees. The establishment of guidelines by the Department is contrary to the statutory text and Congressional intent that the Department not require specific regimens or practices by regulation or guideline. The Department lacks the authority to establish such requirements under any guise, and it would lack the authority to bring any compliance or enforcement action based on such guidelines.

Also troubling is the regulation's requirement that an employer retain "any documentation it received or prepared concerning the treatment of applicants, such as copies of applications and/or related documents, test papers, rating forms, records regarding interviews, and records of job offers and applicants' responses." In other words, employers are being told to keep every resume, inquiry and scrap of paper received or made in connection with a recruitment. For many companies, the cost of housing such paper alone would be extraordinary. Even if one were to agree with the Department's erroneous argument that EEO law requires such retention, this requirement sets up another "violation" that is neither called for by statute nor necessary. As Senator Abraham stated, "The intent is not to require employers to retain extensive documentation in order to be able to retroactively justify recruitment and hiring decisions, provided that the employers can give an articulable reason for the decisions that it actually made." 144 Cong. Rec. S12754.

Validity of Labor Condition Applications.

ACWIA grants the Department of Labor no authority to invalidate LCAs in effect and/or previously approved, yet the regulation imposes such invalidations both in the context of H-1B dependent employers and of companies that undergo corporate reorganizations. With respect to H-1B dependent employers, Congress specified in ACWIA that the new requirements would apply only to LCAs filed on or after the date final regulations were first promulgated. Invalidating earlier LCAs for those employers defeats this explicit statutory statement.

With respect to corporate restructurings, section 401 of the Visa Waiver Permanent Program Act, signed into law on October 30, 2000, states:

An amended H-1B petition shall not be required when the petitioning employer is involved in a corporate restructuring, including but not limited to a merger, acquisition, or consolidation, where a new corporate entity succeeds to the interests and obligations of the original petitioning employer and where the terms and conditions of employment remain the same but for the identity of the petitioner.

The regulation attempts to respect this legislation by acknowledging that employers that undergo corporate restructurings do not need to file new labor condition applications for existing H-1B employees in the entities affected by the change. However, it then micro-manages employer operations, the regulation then proceeds to bar such employers from using existing labor condition applications, effectively invalidating them. The regulation also pre-conditions use of this legislative provision on the preparation and insertion in the file of needlessly extensive documentation. Demanding this documentation is nowhere authorized in any H-1B legislation or in the Visa Waiver Permanent Program Act, and thus is beyond the Department's authority.

Part-time Employees Can Also Qualify as Exempt Employees for Dependent Employers.

The statute states that an H-1B worker qualifies as exempt if he or she ". . . receives wages (including cash bonuses and similar compensation) at an annual rate equal to at least $60,000 . . ." The Department insists that this means that "an H-1B nonimmigrant working part-time, whose actual annual compensation is less than $60,000, would not qualify as exempt on the basis of wages, even if the worker's earnings, if projected to a full-time work schedule, would theoretically exceed $60,000 per year."

As Senator Abraham and Senator Graham indicated in their 1999 comment, "the Department's interpretation is simply incorrect and once again beyond its statutory authority. ACWIA purposely uses the language 'at an annual rate equal to.' This clearly allows for a part-time employee being paid at the rate of, for example, $50 an hour, to qualify as 'exempt' since such a wage would work out to well over $60,000 on a pro-rated annual basis (i.e., if the H-1B professional worked on a full-time basis). Similarly, under the statutory language, an individual who starts work in September, yet makes $50 an hour, employed on a full-time basis would also be 'exempt' even though he or she would not receive all of the at least $60,000 in that calendar year. Congress could have chosen to write into the law the requirement that all of the compensation be received in a given year, but by using the term 'at an annual rate equal to' clearly chose a different route." Nevertheless, both part-time and part-year employment were contemplated by the language of ACWIA, and the Department errs in ignoring the law with respect to part-time employment.

Invention of New Violations and Administrative Remedies

I find myself sharing Senator Abraham's amazement at the extent to which the Department is willing to reach outside its statutory authority to find new violations and impose new remedies not provided to the agency. The Department's deals itself the ability to "assess and oversee the payment of back…fringe benefits to any H-1B nonimmigrant who has not been…provided fringe benefits as required." Nowhere did ACWIA authorize the Department to award "back benefits," and its tortured reading of the statute to give itself this authority does not alter that fact.

The Department added another violation in the interim final regulation: "Violation of the requirements of… subpart I and subpart H…or the provisions regarding public access…where the violation impedes the ability of the Administrator to determine whether a violation of section 212(n) has occurred or the ability of members of the public to have information needed to file a complaint…." Not only is this a "violation" not authorized by statute, it is so broad and vague as to include almost anything that the Department decides kept it from finding the information it wanted. No government agency should have this kind of unfettered power, and it certainly was not authorized by any of the statutes governing the H-1B process.

There also is no authority for Administrator investigations to "determine whether an H-1B employer has: ... (15) Failed to maintain documentation as required by this part; and (15) Failed otherwise to comply in any other manner with the provisions of subpart I or H of this part." (Section 655.805, What violations may the Administrator investigate?) Moreover, since H-1B employers are only required by statute to maintain a copy of the Labor Condition Application and the prevailing wage source in the "public examination file," an Administrator's investigative authority under Sec. 655.805 (14) is limited to these two items. The Department's long list of suggested contents cannot be required by law and should not be investigated.

The regulation also persist in trying to authorize any other sanctions against employers that the Department might later devise, stating that "the Administrator may impose such other administrative remedies as the Administrator determines to be appropriate, including but not limited to reinstatement of workers who were discriminated against…reinstatement of displaced U.S. workers, back wages to workers who have been displaced or whose employment has been terminated in violation of these provisions, or other appropriate legal or equitable remedies."

In fact, as Senator Abraham previously pointed out, the Department is well aware that this is beyond the authority granted it under the ACWIA. The legislative history shows that the Department of Labor sought to obtain this authority, and that at critical stages of the legislative process, Congress twice decided against its inclusion.

Anticipating this move Senator Abraham laid out in his October 21 statement a partial history of the negotiations on this point:

The "administrative remedies" all these clauses refer to (as well as those referred to in new subparagraph 212(n)(5)(E) added by subsection 413(b) of this Act) are unchanged from the "administrative remedies" the current version of 212(n)(2)(C) makes available. It should be noted that these do not include an order to an employer to hire, reinstate, or give back pay to a U.S. worker as a result of any violation an employer may commit. In current law, the Secretary's authority to issue an order for back pay even with respect to H-1B workers who are not paid the prevailing wage does not come from the "administrative remedies" authority granted in 212(n)(2)(C) but from a separate provision, 212(n)(2)(D), specifically authorizing the issuance of "order[s] ... for payment of such amounts of back pay as may be required to comply with the requirements of paragraph (1), whether or not a penalty under subparagraph (C) has been imposed." That subparagraph would have been worded quite differently if the authority it granted was already included in the "administrative remedies" authority granted under subparagraph (C).

This construction of the phrase is reinforced by the fact that suggestions from a number of quarters, including the Administration, that the Secretary should be granted the authority to issue orders of this type with respect to U.S. workers, were advanced and ultimately rejected in the final version of this legislation. In the course of negotiations leading to the bill currently before the Senate, the Administration ultimately was forced to accept the reality that authority of this type could not be conferred without radically transforming the way this program operates and indicated that acceptance by withdrawing its demand for this authority in favor of other concessions. The relevant documents from the Administration demonstrating this are submitted for the record following this statement. As can be seen, the initial document contains a point 7 seeking this authority, and that point 7 is crossed out in the later document. The reason suggestions for inclusion of this type of authority were ultimately rejected was the sense that they would end up transforming the traditional enforcement model used for the current program into something more resembling a new font of civil employment litigation. (October 21, 1998, Congressional Record, S12752).

Point 7 referred to above is contained in an Administration document entitled "Proposed Administration Revisions to H.R. 3736." Point 7 read as follows: "Reference in the bill to 'administrative remedies' includes the authority to require back pay, the hiring of an individual, or reinstatement." (October 21, 1998, Congressional Record, S12756). Because, as Senator Abraham explained to the Administration, the employers seeking the increase in the H-1B cap preferred no increase to this kind of radical transformation of the H-1B program enforcement regime, legislation containing a provision of this type would have no support in Congress. After lengthy discussions about this point, it was finally agreed that there would be no change in the definition of "administrative remedies" in the final legislation.

As Senator Abraham noted in his comment on the proposed rule, this issue was something he "did not lay out during the debate that this issue had also arisen at an earlier point in the drafting of this legislation, during the House-Senate efforts to craft a bill that would be acceptable to both Houses, and that its earlier resolution was the same as the one reached in the negotiations with the Administration. But that in fact is the case. Toward the end of those efforts, Congressman Smith suggested that some such authority should be conferred, initially as part of the arbitration process devised to resolve complaints about violations of the recruitment attestation, and a little later as an authority the Department should have to remedy displacement complaints. This dispute was submitted to the leadership of both Houses, who rejected Congressman Smith's proposal, agreeing that a temporary increase in the H-1B cap was hardly the occasion to create what would essentially be a new federal employment tort. Accordingly, Congressman Smith's post-enactment assertion that the phrase "administrative remedies" should be understood to include "make whole" relief is inconsistent with the understanding he and everyone else involved in the House-Senate negotiations had at the time, which was that additional provisions granting this authority were needed for it to exist. It also does not reflect the agreement that no such additional provisions would be included in the bill agreed to by the House and the Senate. Had Congressman Smith actually suggested at the time the bill was pending on the House floor that H.R. 3736 nevertheless included such provisions, his contention most certainly would not have gone unchallenged or unrebutted on the House floor."

Conclusion

Congress, by passing the American Competitiveness in the Twenty-First Century Act and by increasing the cap on H-1B admissions to 195,000, has unambiguously shown its understanding of the contributions of foreign workers to the American economy and endorsed their continued participation in creating greater growth Therefore, regulations that attempt to chill access of employers to foreign-born professionals on H-1B visas would clearly contradict the purpose Congress created H-1B visas and subsequently and repeatedly expanded their number.

The larger thematic problem with the regulation is that it adopts a guilty until proven innocent threshold that contravenes both the letter of the statute, as well as the spirit in which individuals expect to live and prosper in the United States. Since the labor condition program came into existence, the Department of Labor has identified an average of one willful violation a year committed by employers.

Given the relative paucity of past willful violations, and given that the Department would have to receive either a complaint or information that plausibly alleges a violation, the Department's paperwork requirements appear to serve the purpose of unduly "taxing" all employers, particularly in the high tech industry, in the form of increased compliance costs and staff time, when, in fact, a small number of violators of the visas have been, or are likely to be, demonstrated in fact. Moreover, an employer that is investigated by the Department would have its own interests at stake if it could not produce exculpatory material in the face of an enforcement action by the Department. That makes the proposed requirements of "proving innocence" in a peremptory fashion unwise and in contravention of the statute.

It is hoped that, with the advent of a new Administration, we will see a new attitude in providing the protections of H-1B workers mandated by law without the excesses of paperwork and compliance demands reflected in these regulations. I urge you to look carefully at the requirements imposed by these regulations, and revise them to reflect a reasoned and measured approach, staying within the authority of the Department, to documentation and enforcement.

Sincerely,

Sam Brownback
Chair
Senate Immigration Subcommittee

cc: Tevi Troy

1. ¹ All tax bills must originate in the House.

2. ² See Congressional Record (October 21, 1998).

3. ³ See Deal Reached on High Tech Visa, National Journal, Sept. 24, 1998, at 1 ("Senator Abraham, the lead negotiator acting on behalf of the House and Senate Republicans..."); William Branigin, Deal Reached on Foreign Workers, Washington Post, Sept. 24, 1998, at A2 ("the agreement reached principally between White House economic adviser Gene Sperling and Sen. Spencer Abraham...); Pete Danko, White House, GOP Reach Visa Deal, Wired News, 7:50 PM, Sept. 23, 1998 ("Wednesday's agreement came after intense negotiations over a 10-day period between the White House and congressional leaders, represented by Senator Abraham.").

4. ⁴ See Chrysler Corp. v. Brown, 441 U.S. 281 (1979).

5. ⁵ See, e.g., Mountain States Tel. & Tel. Co. V. Pueblo of Santa Ana, 472 U.S. 237 (1985); Securities Indus. Ass'n v. Board of Governors of the Fed. Reserve Sys., 468 U.S. 137 (1984). Bowsher v. Merck & Co., 460 U.S. 824 (1983).

6. ⁶ See California Teachers Asso. v. San Diego Community College Dist., 621 P2d 856 (1980)(the court looked at whether the statement alluded to the argument presented in the passage of the bill, whether the statement reiterated the discussion and events which transpired in the Legislature, and whether the statement revealed more than the author's personal opinion and understanding of the stature.)

7. ⁷ TVA v Hill, 437 U.S. 153 (1978) (the Court consulted hearing testimony, drafting evolution of the bill, and statements by House and Senate sponsors). See also, Cardoza-Fonseca, 480 U.S. 421 (1986) (Court consulted a variety of sources to determine legislative history).

8. ⁸ See United States v. Giordano, 416 U.S. 505, 517-519 (1974).

9. ⁹ See, e.g. Jefferson County Pharmacetical Ass'n v. Abbott Laboratories, 460 U.S. 150, 156-62 (1983) (private lobbyist drafter); Group Life & Health Ins. Co. V. Royal Drup Co., 440 U.S. 205, 221-23 (1979) (report of private lobbying group that originated bill ultimately enacted)..

10. ¹⁰ See,e.g. Keely v. Robinson, 479 U.S. 36, 51 n.13 *1986); McCaughn v. Hershey Chocolate Co., 283 U.S. 488, 493-94 (1031).

11. ¹¹ See Congressional Record, S. 12750 (October 21, 1998).

12. ¹² See Galvan v. Press, 347 U.S. 522.

13. ¹³ See Carro & Brann, The U.S. Supreme Court & the Use of Legislative Histories: A Statistical Analysis, 22 JURIMETRICS J. 294, 304 (1982) (over 40-year period, approximately 60% of the Court's legislative history citations were to committee reprots).

14. ¹⁴ See Zuber v. Allen, 396 U.S. 168, 186 (1969); Thornburgh v. Gingles, 478 U.S .30, 43-44 nn. 7-8 (1986) (committee reports are the "authoritative source for legislative intent"); Garcia v. United States, 469 U.S. 70, 76 (1984) (the most authoritative source for finding the Legislature's intent lies in the Committee Reports on the bill).

15. ¹⁵ See, e.g., Tanner v. United States, 483 U.S. 107, 122-25 (1987); Gulf Oil Co. v. Copp Paving Co., 419 U.S. 186, 199-200 (1974); S & E Contractors, Inc. v. United States, 406 U.S. 1, 11-12 (1972).

16. ¹⁶ See S12750

17. ¹⁷ Specifically, the Supreme Court held that even the contemporaneous remarks of a single legislator who sponsors a bill are not controlling in analyzing legislative history. See Chrysler Corp. v. Brown, 441 U.S. 281, 311 (1979).

18. ¹⁸ Consumer Product Safety Commission v. GTE Sylvania, 447 U.S. 102 (1980).

19. ¹⁹ See id.

20. ²⁰ See, e.g., Amoco Products Co.v. Village of Gambell, 480 U.S. 531, 553-54 (1987) (refusing to rely on imprecise sponsor statement contradicted by statutory definitions and statements of other legislators).

21. ²¹ See, e.g., Kelly v. Robinson, 479 U.S. 36, 51 n.13 (1986); McCaughn v. Hershey Chocolate Co., 283 U.S. 488, 493-94 (1931).

22. ²² See infra note 1.

23. ²³ See infra note 1.

24. ²⁴ See A summary entitled "Congressional-White House Agreement on H--B" was released to the press by Senator Abraham's office only after the White House had given its approval on the final text.

25. ²⁵ See Clarke v. Securities Indus. Ass'n, 479 U.S. 388, 406-07 (1987) (refusing to rely on sponsor statement uttered after statute was enacted).